Recently a young couple come into my office to talk about their future, and investing. They asked, “What kind of money do you think we would make if we purchase a property, versus renting? Where would we be 30 years from now?”
I thought -- what a great idea to write an article showing everyone the money that has been made by passively investing in real estate.
According to the California Association of Realtors, the median Orange County price in January 1990 was $231,274, and for March 2017 it was $760,000. Let’s do the math: that’s a $528,726 profit, and does not include the tax benefits you would have had for the last 27 years -- and with a 30-year loan, you would be only three years away from having a zero balance. After showing them the numbers, they said, “That could be our retirement.”
I tell this story because it’s important to know homeownership is at its lowest level in over 50 years. Less than 63.6 percent of all homes are owner occupied. The message needs to get out that investing in a home, although it may not be realized now, will probably be the best investment you will ever make over time. On the flip side, owning a rental property, while providing a tax shelter, may also be the best, highest and safest long-term investment a person can make. Basic economics will show that real estate investments will again provide for the retirement of many investors down the road. The rental demand is great and supply is low, so what are you waiting for?
Below is “Your Market At A Glance.”